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Facts
The assessee filed its return for AY 2011-12 declaring income. The CPC processed the return under section 143(1), raising a demand. The assessee filed an appeal with the CIT(A)/NFAC after a significant delay, which was dismissed on merits after the CIT(A) discussed the delay in filing.
Held
The Tribunal held that the DCIT(CPC)'s order was based on the return filed by the assessee, and since no exemption under Section 11 was claimed in the return, the DCIT(CPC) was correct in not granting any exemption. The Tribunal followed a previous order for the succeeding assessment year with identical facts.
Key Issues
Whether the CIT(A) erred in not condoning the delay in filing the appeal and denying the benefit of Section 11, and whether the DCIT(CPC) was justified in processing the return without considering exemption u/s 11.
Sections Cited
143(1), 11, 11(1)(i), 11(1)(ii), 12A, 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2011-12 Lions Nab Community Vs. DCIT, CPC, Bangalore. Eyecare Centre, Plot No.P-39, MIDC, Miraj, Sangli- 416410. PAN : AABFL4373L Appellant Respondent Assessee by : Shri Pramod S. Shingte Revenue by : Shri Arvind Desai Date of hearing : 05.03.2025 Date of pronouncement : 27.05.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This is recalled matter. Vide order dated in M.A. No.151/PUN/2023 for the assessment year 2011-12 filed against the order of the Tribunal in dated 06.01.2023 (appeal filed by the assessee) was recalled to adjudicate the issue de novo.
There is delay in filing of the present appeal. We are satisfied with the reasons mentioned in the condonation application duly supported by an affidavit that the assessee was prevented by reasonable cause for not filing the appeal within time. After hearing Ld. DR, we condone the delay and proceed to adjudicate the appeal. 3. The Assessee has raised the following grounds of appeal :-
1. On the facts and circumstances of the case and in Law the Ld. CIT(A) erred in not condoning the Delay in filing the appeal though there was reasonable cause for the delay.
2. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in denying the benefit of section 11 of the Income Tax Act, 1961 on incorrect appreciation of facts The appellant craves leave to add to, amend, alter, modify or delete all or any of the grounds of appeal or add altogether a new ground of appeal before or at the time of hearing.”
4. Facts of the case, in brief, are that the assessee furnished its return of income for the period under consideration on 30.09.2011 declaring income of Rs.54,93,373/-. CPC processed the return by intimation under section 143(1) of the IT Act on 27.01.2012 and raised a demand of Rs.18,39,689/-.
5. After considering the reply of the assessee, Ld. CIT(A)/NFAC did not condoned the delay of 7 and half year in filing of appeal, however dismissed the appeal after discussing/deciding the merits of the case by observing as under :-
7. Without prejudice to the fact that the appeal is treated as invalid, even on merits, the claim of the appellant cannot be allowed for the following reasons - (i) The appellant has not filed the return of income in the prescribed form. Instead of filing in ITR 7, the return was filed in ITR 5. (ii) The appellant has neither applied nor deemed to have applied 85% оr more of its income during the year for charitable purposes as per Section 11(1) or Section 11(2) of the Income Tax Act, 1961. Perusal of the profit and loss account of the appellant reveals that the income received during the year was Rs.1,09,54,240/- and the amount applied was only Rs.54,60,867/- (49.85% of the income received). The appellant has income accumulated which was brought to the Balance of Rs.54,93,373/- (50.15% of income received) which was more than 15% of the application of income. Therefore, the appellant violated the provisions of section 11(1)(i) and Section 11(1)(ii) of the Act. Therefore, even on merits, the claim of the appellant cannot be allowed.
It is the above order against which the assessee is in appeal before this Tribunal.
We have heard Ld. counsels from both the sides and perused the material available on record including the legal compilation furnished by the assessee. In this regard, we find that the DCIT (CPC) has passed an order u/s 143(1) of the IT Act for A.Y. 2011-12 in the case of the assessee. Assessee had filed appeal before the Ld. CIT(A)/NFAC against the said order. There was a delay in filing appeal before the Ld. CIT(A)/NFAC of 7 and ½ years. The assessee submitted before Ld. CIT(A)/NFAC that the 143(1) had not brought it to the notice of the office bearers of the assessee and hence there was delay in filing of appeal. Ld. CIT(A)/NFAC in para 5.7 of his order has decided not to condone the delay and dismissed the appeal. However, in para 7 of his order, Ld. CIT(A)/NFAC has without prejudice discussed the merits of the case and decided the appeals on merit also. Once Ld. CIT(A)/NFAC has decided the case on merits, it means Ld. CIT(A)/NFAC has condoned the delay, though in para 5.7 Ld. CIT(A)/NFAC mentioned that delay not condoned. However, the subsequent act of Ld. CIT(A)/NFAC deciding the case on merits upheld the order of the Assessing Officer. Aggrieved by the order of Ld. CIT(A)/NFAC, the assessee has filed appeal before this Tribunal. On perusal of the record, it is observed that DCIT(CPC) has not made any disallowance or not added any income but has merely calculated the tax liability based on the return of income. The relevant part of the order u/s 143(1) is reproduced here as under:-
As computed Reporting Heads As Provided by Under Section Tax payer 143(1) INCOME FROM BUSINESS OR PROFESSION 54,93,373 54,93,373 LOSS OF PREVIOUS YEARS ADJUSTED 2,57,057 2,57,057 GROSS TOTAL INCOME 52,36,316 52,36,316 TOTAL INCOME AFTER DEDUCTIONS 52,36,316 52,36,320 AGGREGATE INCOME 52,36,316 52,36,320 TAX ON INCOME AT NORMAL RATES 0 15,70,896 NET TAX PAYABLE 0 15,70,896 EDU CESS+SECONDARY & HIGHER EDU CESS 0 47,127 GROSS TAX LIABILITY BEFORE TAX RELIEF 0 16,18,023 NET TAX LIABILITY 0 16,18,023 234B INTEREST 0 1,61,800 234C INTEREST 0 59,866 TOTAL INTEREST LIABILITY 0 2,21,666 AGGREGATE INCOME TAX LIABILITY 0 18,39,689 NET AMOUNT PAYABLE 0 18,39,689 8. Thus, from the perusal of above chart it appears that the Aggregate Income as per Tax Payer & as per order u/s 143(1) is same i.e. Rs.52,36,320/-.
It is apparent from the order u/s 143(1) that assessee had not claimed any exemption u/s 11 of the Act in the return of income. Since assessee had not claimed any exemption u/s 11 of the Act, in DCIT(CPC) while passing the order u/s 143(1) has not granted any exemption. In this scenario, we do not find any fault with the order of the DCIT(CPC) as the order of the DCIT(CPC) is based on return filed by the assessee. In the statement of facts filed before this Tribunal, the assessee has claimed that it has ironically filed return of income in Form No.5 whereas the form applicable for trust was Form No.7. If this is the fact assessee should have had filed a revised return after getting his PAN number corrected. However, assessee had not taken any action almost for seven and half years. It is also worthwhile to mention here that Ld. AR of the assessee did not bring the fact in the knowledge of the Tribunal that a similar order was also passed for assessment year 2012-13 in the case of assessee itself, however we could lay our hands to the same, wherein under similar circumstances and identical facts CPC has accepted the return filed by the assessee although demand was raised and the assessee challenged the same before Ld. CIT(A)/NFAC who also confirmed the order passed by CPC and when the assessee filed appeal before a Coordinate Bench of this Tribunal, the Tribunal also confirmed the order passed by CPC and dismissed the appeals filed by the order dated 30.12.2022 by observing as under :- “7. We heard the rival submissions and perused the material on record. We find that the appellant had filed the return of income in Form No.5. However, no documents were filed along with the return of income justifying the claim for exemption u/s 11 of the Act. It is only after receipt of intimation, the appellant took a plea that its income was exempt u/s 11 by virtue of registration u/s 12A of the Act. Even the audit report was admittedly not filed along with the petition u/s 154 or before the NFAC. The CPC while processing the return of income u/s 143(1) can take into consideration only the return of income an accompanied document, when the appellant had filed the return of income in Form No.5, the natural inference to be drawn is that the assessee is a partnership firm. When the return was filed as if it is a firm, it follows that computation of tax liability should be made on the basis that it is a partnership firm. The CPC cannot go beyond the return of income. In the circumstances, we are of the considered opinion that the Assessing Officer had rightly rejected the 154 petition as well as the NFAC justified in confirming the action of the Assessing Officer. Therefore, the appeal filed by the assessee stands dismissed.
In the result, the appeal filed by the assessee stands dismissed.”
Under these facts of the case we are bound to follow the earlier order passed by a Coordinate Bench of this Tribunal (supra), under identical facts and similar circumstances in the case of assessee itself for immediate succeeding year i.e. for assessment year 2012-13 and accordingly, we uphold the order of the DCIT(CPC) as the order is based on the return of income filed by the assessee. Thus, the grounds raised by the assessee are dismissed.